Amy Knight
Selling your house has been tough for more than a year. The average UK house price was £285,000 at the end of 2023, which was £4,000 lower than a year before, according to official figures.
Many experts expect house price growth to remain flatter than a freshly skimmed ceiling for much of 2024.
Delays to base rate cuts have seen lenders nudge mortgage rates higher, threatening affordability for would-be borrowers. When buyers get nervous and delay their move, demand dips and house prices typically follow.
This is frustrating for sellers, including those who took on a renovation project hoping the value of their property would increase, as I did.
I’ve recently accepted an offer on my three-bed house just two years after I bought it, having fully revamped the interior. It sold quickly but returned a fraction of what I spent on improvements. Here’s what I’ve learned selling my doer-upper house in 2024.
1. A schedule of works keeps you grounded
Some surveys can tell you what repairs are required and estimate what these might cost, potentially saving you thousands of pounds. However, the survey itself could set you back anywhere between £630 and £1,200. Having maxed out my budget, I skipped the survey and had a trusted family member check the house for me instead.
None of the issues we discovered later would have been a dealbreaker if flagged by a surveyor. But the extra time, effort and expense to put them right could have given me grounds to negotiate the price down and saved some money to put towards repairs. What’s more, creating a schedule of works to estimate the cost of improvements would have helped me to budget for each stage of the project.
Robert Jones, co-founder of the data website property.xyz, told NerdWallet that the key to a successful refurb project is to budget correctly for the work required. A common problem is that buyers “get quite emotional” about a particular property and over-compete, paying too much for it and underestimating the cost of the work required.
Jones recommends creating a detailed schedule of works to estimate what you’ll spend on renovations. “It’s worthwhile spending a little bit of money for a skilled trade or company to give you a comprehensive price on it,” he says.
Lesson learned: If you’re not prepared to stump up the cash for a survey or take time to price up the work (and build a budget), think carefully before taking on a doer-upper. Ask yourself how you’d find the money to deal with any nasty surprises that crop up when you begin your project: would you take out a personal loan? Or, if you’ve carefully saved an emergency fund, are you prepared to dip into it?
2. It all comes down to bedrooms
The work I undertook on my property included reskimming the majority of walls and ceilings, replacing the flooring throughout the ground floor, fitting new carpet on the first floor and stairs, replacing the kitchen, creating a custom-built utility room and having the driveway resurfaced. Shouldn’t the house be worth significantly more now? Apparently not.
“It’s all down to the bedrooms,” says Dave Relfe, a mortgage and protection adviser at mortgage and insurance broking firm Think Plutus. Relfe cautions that unless you can turn a three-bed into a four-bed, or a two-bed into a three-bed, you’ll be lucky to get your money back. “I see clients that do amazing extensions; kitchen extensions, [and] the latest thing, bi-fold doors, and it’s not attractive to a bigger family,” he explains.
For months, my house was a labour of love, but the work we undertook didn’t increase the number of bedrooms – a key factor in why the sale price has remained virtually unchanged.
» MORE: How to remortgage to pay for home improvements
Lesson learned: If you plan to stay for five years or more, you may be more likely to see a return on any additional investment you make, so adapting the property to suit your lifestyle might be worth it. But, if there’s a chance you’ll move within a couple of years, as I did, you could seek professional advice on how modifications might (or might not) affect the resale value of your home. If you do have work done, keep invoices and receipts from any contractors, as a future buyer might want to see evidence that the work was carried out by a professional.
3. You’re only as good as others on your street
While they may not push up the asking price, recent refurbishments can add a wow factor that entices buyers, making your property stand out from others on your street. Some buyers are shopping specifically for a home that has been freshly decorated and requires little or no work on their part. But be warned, that doesn’t necessarily mean they’ll be willing to pay more for it.
Because my interior upgrades hadn’t added enough real value, when my neighbour put their house on the market I had to reduce my asking price to compete.
“Buyers are smart these days. They’ll look at it and think ‘for ten grand we could decorate ourselves’… it helps selling, but sometimes it’s breakeven at best,” says Relfe.
Lesson learned: Look at the sale price of similar homes near yours and use this as a guide. Try to look past the aesthetic qualities and remember that unless your house has a bigger footprint, it’s unlikely to be worth much more than your neighbours’. Keep this in mind when shopping around for the best mortgage rates and use a realistic, rather than an optimistic, estimate of the deposit you’ll have from selling your current home.
4. A quick sale could mean you priced too cheap (and that might be OK)
In an ideal world, house prices would be up when you want to sell yours, and down when you want to buy your next property. But many households don’t have the flexibility to wait for the market to turn in their favour – myself included.
With three boys under 16, our three-bed property is overflowing with bats, balls and muddy boots. Waiting for the value of our house to increase or for mortgage rates to fall was no longer an option. Many homebuyers would agree that there’s always a compromise to be made somewhere. For us, a quick sale meant moving and settling the children before the start of the next school year.
Lesson learned: Whether or not a speedy transaction is worth sacrificing a few thousand pounds for is an individual decision. If your financial situation means you need every penny you can get for your house, you may have to accept that yours could be on the market longer. If you need to move quickly, a mortgage calculator can help you work out how low you can go, ensuring you can still cover stamp duty, legal fees and other moving expenses as well as making changes – planned or unplanned – to your next home.
WARNING: We cannot tell you if any form of investing is right for you. Depending on your choice of investment your capital can be at risk and you may get back less than originally paid in.
Image source: Getty Images
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